February 7 (Reuters) – Wall Street closes lower on Friday following President Donald Trump’s announcement of new reciprocal tariffs on multiple countries. This decision, combined with weak job growth and declining consumer sentiment, fueled widespread investor uncertainty.

The Dow Jones Industrial Average (.DJI) dropped 444.23 points (0.99%) to 44,303.40, while the S&P 500 (.SPX) fell 57.58 points (0.95%) to 6,025.99. The Nasdaq Composite (.IXIC) saw the steepest decline, tumbling 268.59 points (1.36%) to 19,523.40.

Table of Contents

Wall Street Closes Lower Amid Tariff Uncertainty

Wall Street Closes in the Red Amid Trump’s Tariff Announcement – 5 Key Market Impacts

President Trump did not specify which countries would be affected but hinted at broad implementation. He stated that these tariffs aim to address trade imbalances and aid in resolving the U.S. budget deficit.

Mark Hackett, chief market strategist at Nationwide, commented: “Markets initially reacted to the weak jobs report, but attention quickly shifted to Trump’s tariff announcements, leading to a sell-off.”

Wall Street closes the week on a downturn, with initial declines starting when Trump unveiled sweeping tariffs over the weekend. A temporary suspension of tariffs on Mexico and Canada for one month provided some relief before Friday’s slump.

Consumer Sentiment Declines as Wall Street Closes Lower

A recent survey showed that U.S. consumer sentiment unexpectedly dropped to a seven-month low in February, while inflation expectations surged. Households now anticipate inflation to reach 4.3% over the next year, the highest level since November 2023.

Meanwhile, job growth slowed more than expected in January, following robust hiring in the prior two months. The U.S. unemployment rate remains at 4%, making it likely that the Federal Reserve will delay interest rate cuts until June.

The final employment report under former President Joe Biden’s administration revealed that 598,000 fewer jobs were created in the 12 months through last March than previously estimated. However, this downward revision was smaller than the 818,000 job reduction estimated in August 2024.

Explore the latest job reports

Stock Market Performance and Sector Impact as Wall Street Closes Down

All 11 S&P 500 sectors traded lower on Friday, with consumer discretionary stocks leading the losses, falling 2.5%.

Key Stock Movements:

Uber (UBER.N) surged 6.6% after billionaire hedge fund manager Bill Ackman disclosed a significant stake in the company.
Amazon (AMZN.O) dropped 4.1% due to weaker-than-expected growth in its cloud computing division, Amazon Web Services (AWS), and lower revenue projections for Q1.
Expedia (EXPE.O) rose 17.3% after reporting better-than-expected Q4 earnings.
e.l.f. Beauty (ELF.N) plummeted 19.6% after the company cut its annual sales and profit forecasts.

The Cboe Volatility Index (VIX), known as Wall Street’s fear gauge, increased 6.6% to 16.3, reflecting rising market uncertainty.

Stay updated on market volatility

Investor Outlook as Wall Street Closes the Week in the Red

Traders now anticipate that the Federal Reserve will implement only one interest rate cut in 2024, instead of the previously expected two cuts beginning in June.

Federal Reserve officials have expressed concern over economic risks posed by new tariffs and inflationary pressures. Chicago Fed President Austan Goolsbee warned that ignoring potential inflation risks would be a mistake, while Richmond Fed President Thomas Barkin highlighted the uncertainty regarding how businesses will absorb tariff-related costs.

Read expert analysis on Federal Reserve policy

Conclusion: Wall Street Closes in a Volatile Trading Environment

As investors assess the economic impact of Trump’s new tariff policies, Wall Street closes the week with increased volatility. With job growth slowing, inflation fears rising, and Federal Reserve policy uncertain, traders and businesses will closely monitor global trade relations in the coming weeks.